Sindh, KPK youth show less interest in PM Youth Business Loans Scheme

Sindh, KPK youth show less interest in PM Youth Business Loans Scheme | pakistantribe.com

ISLAMABAD – Karachi and Khyber Pakhtunkhwa youth show less interest in Prime Minister Youth Business loans Scheme due to the interest factor, pakistantribe.com reported.

PM Youth Business Loans Scheme attracts almost 75% applicants from Punjab, while KPK youth on second with only 9% Sindh with 8% and Balochistan youth engaged only 2% of total applicants.

PakistanTribe’s business desk find interesting reasons behind the data while discussed the scheme with financial experts.

It is worth mentioned here that PM Nawaz Sharif appointed his daughter Maryam Nawaz as head of the initiative but later Lahore High Court (LHC) has removed her from the position.

October, December 2016 quarter show that the scheme observed 107% increase in applications as compare to the previous duration.

Though Pakistan’s state owned bank NBP leading the loan scheme application numbers, financial experts believe that interest factor in PM Youth Business Loans Scheme keeping Sindh especially Karachi and KPK youth away from the initiative.

At the moment daily sector leading the loans scheme with 40% share, claimed documents available to PakistanTribe.

Financial experts’ believe that inclusion of Islamic Banks in the scheme and addition of CPEC portfolio to the initiative will bring some surge as there are around 700 application pending for the approval, this may motivate KPK and Sindh youth to engage in the scheme.

 

What Is Prime Minister’s Youth Business Loan Scheme

Prime Minister’s Youth Business Loans” will focus on (but will not be restricted to) unemployed youth, especially educated youth looking for establishing or extending business enterprises.
 

Eligibility Criteria

CNIC holder;
Age 21-45;
Entrepreneurial potential;
Applicant may apply for loans under this scheme only from the designated branch mapped with his/her area of residence/business

Security Requirements

One/Up to 03 Guarantor/s having cumulative income equal to 1.5 of the amount applied for under the scheme Personal/Blood relations can also give guarantee for a borrower.
A government servant of BPS-16 and above can also act as a guarantee.

Focus on Women

50% quota of women borrowers.

Debt-Equity Ratio

90:10 with tenor of up to 8 years (including 1 year grace period).  The borrower’s contribution of equity would be either in the form of cash or immoveable property, and will be required only after approval of the loan.

Permissible collaterals (business hypothecation)

Pricing

6% fixed for borrower but government will pay the difference of the cost at KIBOR+500 bps.

Sectoral Distribution of Loans

For the time being, there will be no limit on the maximum number of loans for any sector. Placement of ceilings can be considered subsequently keeping in view the importance of sectors and applications received for various sectors. 

Size of Loan

Up to Rs. 20 lacs

Geographical Distribution

Whole of Pakistan
In the case of Balochistan, at least one branch of NBP will be designated per division
All non-designated NBP branches will guide the borrowers to the nearest designated branch along with facilitation to receive and dispatch the application to the nearest designated branch if so requested by the borrower.

SBP to ensure that loans are broadly in conformity with provincial populations.

Form processing Fee

Non-refundable form processing fee would be Rs.100/- at the time of submission of form. However, no fee will be charged for the form itself and a photocopy will also be admissible.

Application Form

Will require minimum essential information and the format will be as simple as possible to facilitate applicants

Training

SBP will arrange appropriate training for private banks to implement the scheme. NBP and FWBL will provide appropriate training to their own staff. NBP will also assist in training of FWBL and SMEDA Staff

Executing Banks

Sectors and Products

All sectors. Standardized schemes/projects/ undertakings will be designed by SMEDA, projects designed by private sector service providers or by individuals themselves.
Role of SMEDA:
The 50 or so feasibilities prepared and uploaded by SMEDA would be extensively publicized and their access to public made easier through multiple linkages with other relevant websites;
SMEDA will work closely with Punjab Information Technology Board (PITB) to ensure that the schemes are accessible to those who participated in the PITB survey;

 

About the author

Shahid Abbasi

Shahid Abbasi is founder and editor of PakistanTribe.com. with 10 years experience in conventional media, he is one of the pioneers of new/digital media in Pakistan. He tweets @MShahid_Abbasi

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